Incentive Schemes for Local Government: Theory and Evidence from Comprehensive Performance Assessment in England

Benjamin Lockwood and Francesco Porcelli

No 3483, CESifo Working Paper Series from CESifo

Abstract: This paper studies Comprehensive Performance Assessment, an explicit incentive scheme for local government in England. Motivated by a simple theoretical political agency model, we predict that CPA should increase service quality and local taxation, but have an ambiguous effect on the efficiency of service provision. We test these predictions using a difference in difference approach, using Welsh local authorities as a control group, exploiting the fact that local authorities in Wales were not subject to the same CPA regime. To do this, we construct original indices of service quality and efficiency, using Best Value Performance Indicators. We estimate that CPA increased the effective band D council tax rate in England relative to Wales by 4%, and increased our index of service quality output also by about 4%, but had no significant effect on our efficiency indices. There is evidence of heterogeneous effects of CPA on efficiency, with some evidence that CPA impacted more on less efficient councils, and the ‘harder test’ from 2005-8 having a much bigger effect.

Keywords: local government; incentives; efficiency; difference in difference; DEA (search for similar items in EconPapers)
JEL-codes: C21 H10 H70 H77 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp3483.pdf (application/pdf)

Related works:
Journal Article: Incentive Schemes for Local Government: Theory and Evidence from Comprehensive Performance Assessment in England (2013)
Working Paper: Incentive Schemes for Local Government: Theory and Evidence from Comprehensive Performance Assessment in England (2011)
Working Paper: Incentive Schemes for Local Government: Theory and Evidence from Comprehensive Performance Assessment in England (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3483

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().